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POLICY: What’s right about Krugman? What’s wrong about Don Johnson?

Krugman’s series on health care continues in the NY Times and no doubt Don Johnson (over at BusinessWord) will be fulminating over this too. Don got a little offended when I called his stance mean. Don is a sensible guy and understands health care well, even if we disagree on on policy and politics.  So what do I mean by "mean".  Let’s ignore the fact that Don thinks that moderate social democrats like Krugman and Uwe Rhienhardt are the hard left — any observer of real politics would be giggling at that one.  I mean have they seriously suggested nationalizing health care delivery? No. Let alone nationalizing steel, autos, oil, and even agriculture.  (Yup, Don, that’s what the "hard left" from Lenin to Bevin did.  By his standards FDR was a Bolshevik).  But let’s look at Don’s opinion:

"I guess it’s ‘mean" to advocate regulated free markets that:
1. Help us have the lowest unemployment levels and lowest income taxes.
2. Give people who take the time to become educated, find rewarding jobs and seek out health care providers they like the freedom to spend their money on health care, if they think that’s important.
3. Try to minimize the role of centralized governmental planners who’ve never successfully created a health care system that cares for everyone in the country and makes everyone happy.
4. Give everyone incentives to earn the money needed to buy the best health care they can afford.
5. Not force wage earners to pay for the health care of strangers who could buy their own insurance if the politicians weren’t so good at giving everyone else’s money away in exchange for votes of the unthinking left."

The problem with this rhetoric is threefold. First, even if one accepts that we have "regulated free markets" in the rest of the economy and all those commies in Europe, Canada and Japan don’t, no one can seriously maintain that health care is a regulated free market like, say, buying groceries. It fails all of Adam Smith’s sniff tests for being in a state of perfect competition, and any serious student of the subject only has to read another Princeton hard lefty Paul Starr to know that the combination of vigorously pursued professional hegemony and third-party payment has left us with a system run by providers of various types, mostly for their own benefit.  So health care isn’t a regulated free market and people aren’t in a position to "spend their money on health care, if they think that’s important" the way any rational economist would understand–even if the vast majority of people didn’t have third party payment to cover that spending — which they do.

Second, Mark Pauly, a health care economist who is in Don’s camp wrote a hysterical piece in Health Affairs a few years back suggesting the reason we were so inefficient in our health care spending and spent so much on it, was that we were so efficient in the rest of the economy —  and could therefore afford to act like drunken sailors when it came to health care. I never understood why just because we had (apparently) lots of money to spare because we are a rich and productive nation, we should spend it all on a very inefficient health care system rather than, say, on Frappuchinos, education for first graders, or invading foreign countries which don’t have anything to do with us. There is no rational connection between the overall economy and how we choose to allocate resources to health care.  How we allocate resources to health care, and how much we allocate, is largely a political question. It’s directly political (in the 50% that the government pays for) and indirectly political in how (in order of importance) the government treats the taxation of health benefits, how it controls the industry’s pricing and capital spending, how it encourages its citizens to allocate their resources, and how it allows lawyers to persuade doctors (and doctors to persuade doctors, and drug companies to persuade doctors) that more care rather than less care is better. What any of that has to do with overall productivity in the economy escapes me. Finally while it may be a nice idea that health care is a luxury good that consumers will buy on the margin in preference to other luxury goods, that is not how we’re buying it yet and won’t be for quite some time.

But the third issue is where I call Don mean. Politically we have a straight choice.  We know that the costs of the health care system fall disproportionately on the poor and the sick.  And we also know that access to health insurance coverage is lower among those groups. Suggesting that people could voluntarily buy health insurance but just aren’t doing so is in my opinion total BS, and appears to be backed up the the opinions of America’s employees who are desperate to maintain their health benefits from their employers. Further we know that those without health insurance struggle mightily with the costs of care, and many more of them are in trouble than their equivalents in other countries where their access to coverage is subsidized by those people paying those high taxes that Don obsesses about (something else that needs to be refuted in another post).

You may recall that in the last couple of years we’ve had the ability give big tax cuts to the rich, and to spend nearly $100bn a year invading Iraq. The money that went on either of those political initiatives would have easily covered expanding health insurance coverage for those at the bottom end of the social ladder. In general you’re either for this or you’re against it.  And I think that, knowing the consequences of not having insurance on the health and wealth of those without it, to take the "against" position is mean.

 

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  1. I’ve been reading your blog and find many clear headed thinkers who are trying to tackle the problem of health care.
    In my observations I have noticed many problems about healthcare. Cost is just one of them. Insurance costs a lot. Not having insurance costs a lot. Medical Malpractice insurance costs a lot. Defensive medicine costs a lot. Drugs cost alot. Social ills cost a lot (i.e. alcohol, illegal drugs, smoking). As patients, however, we’ve become disassociated from these costs other than to know everything is damn expensive. Healthcare is a hard nut to crack. Lots of people have their hand in the cookie jar and they’re not going to pull it out until there is a loud enough uproar from people frustrated and furious enough to slap it away.
    The myth that our health care system is a free market is so untrue it’s laughable. Is there any industry out there that is more regulated by the government? The fact is, there is no perfect solution. However, the current system has devolved into one that is not fair. There are the uninsured of course, but what of the insured who have so many roadblocks to adequate care. So much is paid for insurance and so much is done to deny them their benefits. The only group of people who truly have great healthcare are the rich, bc they can buy ‘the best’ out of pocket. Even the rich are at risk, bc they can’t control if they get into an accident are they near a trauma center, will their ambulance get diverted to a lesser hospital without necessary specialized care? The problems in the system spill over and effect everyone.
    I think the best way to target the problem is not by targeting the uninsured, per se, bc the lawmakers don’t pay attention to those without influence. The plan is to target the middle class, bc they are the ones feeling the pain now. You have a good job that gets you good insurance or else you better be healthy, bc an individual cannot buy health insurance if they have chronic medical problems. Only healthy people can buy good health insurance. It’s a catch-22.
    I would like to address this next excerpt from a previous poster bc it epitomizes the misconceptions the average person has with the healthcare system:
    “Please explain to me, why a system that provides the best care in the world to at least 80% of people, is somehow so bad?? These people talk as if our system is horrible. Expensive- yes. Horrible- no. Needing reform- yes. But the left seems to focus soely on costs. People dont care about paying more, if they feel they are getting the best. Thats why the left has to focus on the failures of the system and exaggerate them.
    The biggest problem with our system is the stupid idea of low co-pays.”
    First of all, as a health care provider who knows doctors in other countries, I would say when our system works well it is the best in the world. Unfortunately, our system is currently like cracks in a dam repaired with silly putty. It is failing, rapidly, and about to blow. I have seen the system at its best and at its worst, and for many people, the system is horrible. And by the way, I don’t just mean patients, I mean for doctors as well. Second, our healthcare system is expensive because of a million reasons, and only a few of those have to do with its quality. Good care does not have to be as expensive as it is. It is not true that you get low care for less money and high care for more money. Often you get average or poor care for more money and good care for less money. Third, we do not need to exaggerate the problems with healthcare, there are so many, I don’t need to.
    If we don’t point out the failings, we can’t begin to arrive at solutions. However we need an intelligent discourse, like this blog, where ideas can be put out without political bias. Just good ideas. I fear that nobody will listen until the sky is actually falling, however, the hope is that we can enact gradual changes that will reform healthcare to be good for all patients and forstall the inevitable (and in my opinion imminent) collapse.
    Anyone who has ideas, real plans for reform, I’d love to discuss it with you. Feel free to email me.

  2. Health care isn’t just a nice-to-have, it’s also a national and local security issue.
    That guy walking around with a communicative disease? We want him isolated and treated even if he can’t afford to pay.
    When trauma centers close because they treat too many uninsured patients, even the wealthy are faced with 20-30 minute ambulance rides instead of 5 minutes, minutes that matter.
    We provide a free education to every child in America. Why not free health care?
    Having health care tied to employment won’t help you if you or your child becomes sick, and you have to quit your job. How many medical malpractice suits are simply to pay the bills for a lifetime of specialized medical care – whether the doctor is at fault or not, the patient still is stuck with the bill. My contractor and my auto mechanics guarantee their work – most doctors don’t.
    I don’t think people should be allowed to opt out of medical insurance as long as the system is obligated to treat them. When I started my business, I found out that due to past preexisting conditions that neither I nor my daughter could be covered by an individual policy – at any price. Fortunately, for the 2 years we went without neither of us needed any care. When an insurance agent tells you that declaring a bankruptcy if necessary is a more rational choice than trying to purchase insurance, you know there’s something wrong…

  3. maybe it sjust me, but where is there any substnce in the Krugman article? he doesnt say hardly anything, other than we pay too much, and we have too many private interests. He says NOTHING. He guesses at the number of people who work for health care, but have nothing to do with health care.
    Are you serious? this article would not pass a laugh test for a high school paper. An editor would ask for some factual basis.
    Please explain to me, why a system that provides the best care in the world to at least 80% of people, is somehow so bad?? These people talk as if our system is horrible. Expensive- yes. Horrible- no. Needing reform- yes. But the left seems to focus soely on costs. People dont care about paying more, if they feel they are getting the best. Thats why the left has to focus on the failures of the system and exaggerate them.
    The biggest problem with our system is the stupid idea of low co-pays.

  4. sorry,
    i didnt think an intelligent response was actually called for. Since I saw someone agreeing with Krugman, and also using that same old tired “tax cuts for the rich line”
    guess what. I didnt have insurance for years, because i didnt want it! I saw no need, i was young and was never sick. Why waist my money. People do choose not to have insurance.
    since our health system is not truly capitalistic, whe shoudl therefore continue the non-capitalistic reforms??? Those have been working really great, havn’t they????

  5. Wow, I’ve missed a lot! This a real good thread.
    First off, I do believe in many areas health care is a “regulated free market”. I won’t say that UK, France, & Spain do not have free markets in the health care arena, but Canada sure doesn’t.
    There are a proliferation of 3rd party payers but the majority of those payers are gov’t sponsored (Medicare, Medicaid, SCHIPs programs, military, etc). The expenses and costs in these single-payer models have increase as dramatically over the same time as private insurer’s experience. So to say that a sole government model is the answer is ridiculous. The analogy is, supporters of nationalized health care would have you believe that the government buying a Mercedes Benz will somehow be cheaper than a private citizen buying the car. It’s just not going to happen. National health only addresses one special interest in the supply chain of health care today, namely insurers but ignores the oligopoly other in the supply chain enjoy. Self-funded plans enjoy a large share of the market and these plans are direct purchasers of health care.
    I believe the safety net should be expanded. Medicaid and SCHIPs programs are supposed to address this need but the bureaucracy and paperwork involved discourage many from applying. Not to mention the social stigma associated with such “welfare” programs. Also, many so-called “Medicaid” doctors are not in the areas most low-middle class families would take pride in going to. And don’t forget most affluent doctors refuse to accept Medicaid payments. Yet Medicaid is growing problem for many state budgets. I agree that much of the money spent on tax cuts could have gone to expand, or at least shore up, Medicaid (did this republican just say that?;) Still, a broader strategic approach is needed unfortunately like some have already stated the stakeholders and politicians lack the will, or the motivation to act.
    Hey gadfly, I thought you chastised me about relying too much on numbers and speculative reports disputing “accepted” numbers. Now you disagree on the unemployment figures? J/k Seriously, 6% is an acceptable number. Ideally, I would love everyone to work but let’s face it, there just isn’t work for everyone (or work everyone likes). If you are espousing some sort of system to provide income to every worker in America then you maybe you do resemble on of these social-commie Bolsheviks. And when you talk about jobs and the unemployed you have to address the fact that some people simply are not willing to accept certain available jobs. I know, I used to work at the state unemployment office. Many folks refused jobs for silly reasons: too far, too hard, I don’t like the boss, less than what I was making. Also, many people actually had paying jobs (in the black market) but refused to report and still collect benefits. Therefore, in some sense the number is overstated. It really becomes an issue of preference not just jobs. And then people wonder why we have an immigration problem. Personally, if I needed to support my family I would do almost anything to do that. I will leave my ego at the door. Unfortunately, in a materialistic society with unnatural expectations and pressure of status some people would rather go unemployed than take an available job. (gadfly, I still value your opinion though)
    Sue, you gave realistic examples but some of the decision people made were poor. Example, the decision to choose wages over health benefits was not a very smart one. Look at the auto industry. Unions chose health benefits over wages for decades, and the bet turn out to be worth billions. The example of your brother dropping his coverage to join his spouses, only to be left without coverage after her being laid off until OE is troubling. Only because most policies allow employees to re-enroll off cycle in the event of their spouse losing coverage (in Florida it is required). Hence, the example you provided would never happen in Florida. The decision you brother made to jump to the most affordable plan without any consequences occurs every day here in FL. Individual coverage in FL is in the neighborhood of $150-300 a month (underwritten policies, check out ehealthinsurance.com for comparison). Often the costs for Individual health has more to do with the health of the market and govt regulations than anything else.
    The barriers to finding viable solutions to health care are erected by the same parties clamoring for solutions (providers, hospitals, insurance companies, employers, politicians, pharmaceuticals, and even consumers) because everyone is seeking to preserve their advantage in the current system. There must be a fundamental change in the nature of the dialogue before any advancement on the problem can proceed. Many of the arguments any side makes usually begins by allegations of near criminal behavior of some other stakeholder in the system. In any negotiation, coming to the table with that attitude gets you know where.
    It is a tough issue, and I agree with the conclusion made by the CEO of Kaiser something major will have to happen. The reason is that Americans buy their very nature are a Walmart-minded society. We want anything and everything we want for the lowest possible price, screw everyone else. The concept of rationed care, or restrictions will never be accepted by the current American consumer mindset. No one wants to accept the fact their doctor may get paid less for their services, or that you can’t sue him for as much as you want, or that hospitals shouldn’t make so much money.
    I believe in an incremental approach where Medicaid is expanded to help those at the bottom. Or at least allow certain people (200-300% of NPL) to buy-into Medicaid. Second, Don’s suggestions that PCP visits (and other low frequency, low dollar treatments) should not be reimbursed by insurance (pass on the negotiated savings). That’s like buy insurance to pay for groceries, or your gas bill. Insurance theory is not designed to work for routine purchases. These services should be paid by consumers. The $5 copay from HMOs did a great disservice to the American understanding of health care. If paid for by consumers, you will force transparency in at least one level of the system while at the same time reducing insurance premiums.

  6. Also, information needs to come to the incompetent people, since they may be too incompetent to find it.
    I just found a really great site for discreetly finding out if you are eligible for government benefits:
    http://www.govbenefits.gov/govbenefits/index.jhtml
    It would have been nice to have known about this a year and a half ago…

  7. Don:
    Thanks for clearing up the bit about incompetence.
    Actually, in a market-based system, I feel all incompetents should be given some sort of coverage – regardless of the source of their incompetence – at least for the short term.
    Incompetent cell phone salepeople, accountants and realtors who find themselves out of work should all get some sort of temporary respite.
    Why not give the incompetent 90-days of coverage?
    I think this could help the economy tremendously.

  8. Don – I believe you left out the corollaries:
    //those who refuse to take jobs that are beneath them//
    There is no Uber-Employer allocating jobs. People aren’t often offered jobs that are beneath them. Employers will reject them as “overqualified”. And that’s a good thing, because it’s a waste for society as a whole when people aren’t working to their potential. One of the virtues of a free society and a market economy is that people will strive to use the skills the have.
    //or won’t pay what they think they’re worth,//
    Are you saying businesses should be empowered to draft labor? If society discourages people from negotiating for appropriate compensation for their skills, then businesses will pay the lowest price for labor they can get away with. Which is might be nothing if we decide to revert to slave labor. Hey, slaves would make businesses very competitive in the world economy, and that’s what’s important. The actual people are disposible.
    //those who have betrayed their previous employers//
    You leave out those who were *betrayed by* their previous employers. I’m willing to bet that’s a lot more common. The necessity to protect their professional track record just keeps them quiet. It requires a big personal sacrifice to put your disgruntlement on the record. *points to self as proof*
    Don, your views are sadly one-dimensional. You think the point of view of business can somehow be divorced and compatmentalized from the rest of society. At the end of the day, though, businesses need people to come to work. If people are too sick to work or all dead in the street, there is no business. There is the slave solution, but I really hope that people have it in them to rebel if it comes to that. Human beings aren’t functional components for business. The purpose of business is to produce and distribute resources for human beings.
    //And it’s not the employer’s job to provide health care.//
    I’m the first to agree with this. Even employees would benefit from having transparent terms of compensation – the idea of “total compensation” is just confusing everyone, and it’s not something people can negotiate up front for before they take the job.
    //many don’t because they prefer to game the system.//
    Which many interpret as the gentle art of individual self-defense in a world where the system is gaming them.
    //employers buy insurance that is good for them, not for the people being insured//
    This is a good point.

  9. LOL – Abby, I had the same reaction about the Vet, but your argument sounds smarter. Have you considered law school?

  10. Sorry if I didn’t make myself clear. By incompetents, I mean mentally incompetents. About 10% of the population are mentally incompetent due to low IQs, severe mental illness or substance abuse. They are poor because they are unemployable, and they are unemployable because they are incompetent. So we can’t expect them to be able to afford health insurance. They are, for the most part, wards of the state.
    We are at or above full employment at 5.4%, compared historical unemployment rates, except for a few temporary spurts. Unemployed people include those who are between jobs, those who refuse to take jobs that are beneath them or won’t pay what they think they’re worth, those who are taking a break, those who have betrayed their previous employers, etc. There is no way anyone can make everyone employable or make work for everyone. Society can’t and won’t stand for it.
    And it’s not the employer’s job to provide health care. It is the workers job to buy health insurance, and many don’t because they prefer to game the system.
    Insurers should not cover primary care, doctors’ visits. Patients should. Paying insurers to cover your primary care is like paying a bank interest on your savings account and allowing it to invest your money until you need it. Makes no sense and it’s a fraud.
    Remember, employers are dishonest or biased brokers who get between insurers and people who buy insurance. As brokers, employers buy insurance that is good for them, not for the people being insured. Employers must be taken out of the equation, but it won’t happen any time soon for obvious political reasons.

  11. //using the vet example//
    This is a great examply…but it leads to the conclusion that sometimes the trouble, the expense, and the wish to spare pain leads to your pet being put to sleep. I’m getting creeped out by the idea of a doctor coming into the room to say “here’s the bill for you’re elderly aunt – you clearly can’t afford it, and she’s in a lot of pain. Perhaps you should consider putting her to sleep.” *shiver*
    //10 upper middle class families that I encounter either in upscale social settings //
    I know it’s realistic that a problem has to effect the people with upscale resources before anything gets done about it, but this still depresses the heck out of me. It reflects poorly on the progress of civilization.
    //non-issue because we as voters and consumers aren’t making it an issue. We just accept a system that is broken.//
    I totally agree with this. I think it’s also a media and information issue. People “accept” things because they either don’t have access to alternative information, or they are being successfully overloaded and distracted by the barrage of misinformation, or they are sharply aware that they can’t trust the information they’re being exposed to and therefore can’t make good decisions about anything. As mentioned before, I don’t think simply offering more information and improving access solves the problem, because people are leading increasingly complex, demanding lives, and they tend to make most of their decisions on the basis of defaults, speed, and ease of accomplishment.
    To me Health Care is just an example of this larger problem. A few months ago Matt published a link to a great academic article about the ideological divide in Health Care. That article made it clear that the twain shall never meet between Personal Responsibility folk and Social Responsibility folk. The last presidential election showed that people vote Ideology before anything else. I think this is because Ideology is easy: you just have to think about a few basic principles and hope that every other problem in life will boil down to that.
    One thing I think everyone agrees on is that we all want the maximum of freedom and to not have some Tyrant or Expert or Bureaucratic Power making the decisions about the important aspects of our lives. I think everyone would also agree that access to health care is one of those really important access. My suspicion is that the only way to solve the Health Care problem is to sacrifice a little Ideology. Even if it’s demeaning to the Glory of Human Potential, we just have to accept that individual people are not able to deal with all the factors that go into Health Care. We need to come up with a process to cultivate negotiators, advocates, experts, and champions that we can *trust*. It’s more important at this point to actually solve some of these problems than reserve individual control over reading the small print.

  12. Sue–One reason that malpractice for vets is cheap is that, as a legal matter, pets are just property. I bet that it’s pretty high for vets treating Kentucky Derby champions. But your pure bred lab is only worth a couple thousand dollars, and if it’s in really bad shape it gets euthanized. Not so with humans, at least not yet.

  13. David, you are making the exact point I’ve been trying make. The system is broken and abused by both users and care providers. I keep using the vet example because I’ve gone through a series major medical issues with family pets and always gotten good visibility into choices and costs prior to making decisions. My vet can tell me what an operation, blood work or ultrasound costs by simply looking up the pricing on her computer. There was never bill confusion or really any confusion in treatment options. With good IT, a visible cost structure (vs. a reimbursed coding system that makes airline seat pricing policies look streamlined), a mediation system for delivery of service claims (i.e. limits on malpractice awards), an audit function related to premium increases and consumer education we could have a government-regulated, private health care system that worked fairly well. Instead we have a system that no one understands and huge variances in premiums on a state-by-state basis. By the way, the difference I see in that isn’t as much about market demographics as it is about whether or not a given region has a couple of competitive insurance plans. This blog also has a 2004 post that suggests state regulation does impact cost competitiveness of insurance plans (more regulation tends to equal greater access and lower premiums). Five years ago I knew one or two people who had issues finding health insurance and they tended to be entry-level workers or part-timers. Today I know at least 10 upper middle class families that I encounter either in upscale social settings or day-to-day business activities that have this as a continuing issue related to their long-term employment choices and I tend to meet more every month. I recognize we all need to re-think health care to control costs. We as consumers will pay more, but insurance companies and health care providers need to find ways to take cost out and perhaps learn to accept lower profit margins (manufacturers have made that adjustment, why should financial services not have to?)The government needs to find a role that helps incentivize that transition quickly (as it did with technology migration in the 50s, 60s, and 70s), because we are going to see a health care crisis long before social security goes into the red. It is a non-issue because we as voters and consumers aren’t making it an issue. We just accept a system that is broken.

  14. I posted the following on Don’s, but I’ll post it here as well since there seems to be lots of debate in THCB:
    ___________________
    I’d like to point out the silliness of the “government bad, markets good” debate that Don seems to be waging with Matthew Holt. Both are tools and, as with all tools, use of them can produce good or bad outcomes (e.g., a hammer can be used to build homes or to kill). As tools, goverments and markets need not be in opposition, but can complement each other.
    In fact I see greatest strength in the American economy precisely where there is the combination of good, active government actions and well functioning markets. One example is high tech, where the government has actively financed and prodded seed ideas (e.g., 50% of the IT sector can be traced back to early investments by the military’s brilliant DARPA project alone, much of biotech and pharma products stem from our national health research investments, and early venture capital firms got much of their funding through the Commerce Department).
    Another area that works relatively well in the US, an area very relevant to health care, is our finance sector, where the SEC and other agencies work hard to counter inadequately balanced information. In finance, the investor never fully knows the intent of financed regarding how the money will be used; thus the need for “Blue-Sky” laws. Large gaps between parties in who knows what can ruin markets, unless a government or similarly empowered body steps in.
    And guess what: Health care is rife with poor information balance. Docs know a lot that the rest of us don’t; patients know much about their condition that they frequently don’t share, particularly with insurance companies; and insurance companies have their own lock on information. And none of the parties, least of all patients, have a clear notion of what decisions bring quality outcomes. Note that bad information balance is only one reason why untended markets go awry in health care.
    Don, you seem to be arguing that our current market is good because individuals can make their own decisions. If the structure of the market gave individuals’ incentives and knowlege to make good choices, I would agree with you, and I believe Matthew Holt would as well. All of us acknowlege the powerful benefits of a well functioning market.
    However, few parties’ incentives are currently well aligned with good overall outcomes. Docs are paid to do more, even if more care brings worse outcomes; individuals gain from staying out of the insurance pool until they get a chronic condition; and insurance companies make most profits by avoiding those who need care most.
    Incentives could be aligned with society’s best interests, and part of that requires designing a government role where it works to enable better health care markets; however, we haven’t. It wouldn’t be easy to create such a system, but it is possible. We aren’t likely to see the effort made, unfortunately, because our political discussion is mired in this nonsensical debate as to whether government is better than markets or v.v.
    Again, both government and markets are powerful tools, tools that can create both beneficial results and the opposite. With the difficult issues facing health care, we must turn to effective and steered use of both if our problems are to be resolved.

  15. //right now they have a perfect market with rigged pricing and little consumer discretion in terms of shopping on price.//
    Part of the problem is that society is complex, and it’s hard for people to keep up with the basic demands of life. This is the small print problem: people are legally presumed to be competent to read the small print, but businesses take advantage of the reality that people have to ration their time. This is what makes me think that more transparent pricing (for dentists as well as physicians, please!) isn’t going to help all that much. I think we will end up with Cable Company situation, where the person who offers the easiest and quickest solution ends up dominating a geographic space so competition will just lead to consumers having to take whatever price quoted.
    To my mind, the biggest problem with maximizing health care choice is that people will choose slavery – they will calculate that they need that extra hour of sleep immediately, and health problems might be deferred. Also, I think the biggest thing that drives people’s refusal to buy health care is not “irresponsibility” – it’s fear of an unfair situation. It’s fear that your neighbor is paying nothing (while boasting about his/her ability to send their child to private school), or fear that other people have the kojones or the luck to negotiate a better deal, or fear that you are paying for a CEO’s private jet instead of medical care. IMHO, people don’t discuss these factors honestly enough: they are too afraid of seeming petty or revealing their financial fears. The reality is most people have to make hard financial decisions everyday, and they need to actively avoid being ripped off from any number of angles. No matter what the pundits are telling them, people don’t internally regard purchasing their own health care as prudent.
    As far as I can see, a universal solution is the only way to address this. People need to feel that they are paying something fair, and everyone is sharing the same burden. I think people would feel better about knowing they were paying their fair share than in living in an abundant choice situation where they have to put the effort into shopping for the lowest price (re: who is paying them for that effort?). I know there’s the whole big government boondoggle issue, but maybe that just requires a big negotiator on behalf of the people and ongoing vigilance against corruption.
    Of course I also think a lot of money could be saved if technology and innovation were treated as toolsets rather than Deities, but I think I’ve already beaten that horse to death…

  16. //as our economy switches to a “service” economy//
    I think we’re looking at a two-fold switch. One is to a “service” economy (where everyone is taking a cut of increasinly thinner productivity surpluses) and the other is to a “flexible” or “project-based” economy. Business interests have been promoting the idea of a flexible economy for years, because it allows them to be leaner, more competitive, and more profitable. No one is being paid for off-peak times, and people don’t accrue benefits that come with seniority (I guess it’s cheaper to “pay for experience” – though I have yet to see a convincing way of measuring that experience).
    Anyway, the flexible economy is rational from the point of view of an organization, but not from the point of view of the individual. The individual will spend their life in a state of disruption and chaos, and they will not be contributing to the economy or paying income taxes for the vast periods of time they have to spend looking for new work. No one seems to be factoring that “individual” burden in as a cost for society as a whole. Just furloughing a person is a cost in productivity – even before society starts paying out for food stamps and ad hoc visits to the ER.
    I’m not sure that people understand that business interests, and all their media buys and lobbying power, have been actively engineering this outcome. Chewing up people is good for short-term business goals. Only action in the public interest can challenge this trend. People have to notice that they have been reduced to canon fodder and actively protest. To me, the health care problem is only one symptom in that general battle. As complex as the health care problem is, at least people understand that all those uninsured people are public problem, and their very existence is picking *your* pocket. I wish there were a way to get people to think that way about unemployment.

  17. Sue,
    I do want my doctors visits underwritten, and I want someone negotiating on my behalf when I purchase prescriptions.
    A community enrollment PPO for someone my age (29) in Massachusetts is $500/month. I have no idea what the costs are for people who are older.
    gadfly,
    I agree that there’s no change in sight. I don’t think that electing the right politicians will do anything unless we are able to push a major attitude change in the public. I’m not willing to say that it’s impossible. I think it will take a long time, a decade or two, but I think we should try.
    I don’t really think that we can rely on pure reason which is why I’m asking…how do we get people to change the way they view the government’s role in dealing with this problem.

  18. We seem to assume that everyone who is employed has access to health insurance, but over the last few years a lot of small employers are dropping it. A few examples: my accounting firm (one the larger independent firms in El Paso), made the decision last year to drop health insurance. Costs were rising and all their employees had access to insurance through spouses. Employees preferred the loss of a benefit like health insurance to loss of raises or a greater employee co-pay. My brother who works at Raymond James corporate headquarters dropped his health insurance last year when they raised employee premiums because his wife’s plan was cheaper. She got laid off and her new employer didn’t have health insurance. They were uninsured for several months until my brother could access open enrollment again (this illustrates the fallacy of employers who assume their employees can be covered through spouses’ insurance). I have several friends who all have self-employed spouses (making $60K-$100K) who are having difficulty finding affordable health insurance options. One prays to God not to get sick, one switches policies every couple of years and one found some affordable coverage with a $10K deductible. In short, as our economy switches to a “service” economy expect to see benefits erosion in health care. I’m paying $6500 a year for individual health insurance and I don’t take any medications or have any chronic health problems. I understand completely why some middle class people are questioning the wisdom of throwing that much money away every year. Everyone I’ve mentioned has either some college or multiple degrees. Most are earning a good living. They don’t free health care or government assistance. They simply want to be able to shop for insurance at reasonably affordable rates. In our area, individual premiums are running $500-$700 a month (even with large deductibles) and family coverage can run $800-$1000 a month. There are teaser rates in the $300 month range, but that typically isn’t the underwritten rate for association policies or anything with associated with “group” portability protections. Policies with large pre-existing condition exclusions can run lower, but technically you are uninsured for the conditions. Many of the self-employed simply can’t insure some family members because even the slightest health problem is excluded. If we were poor we could get access to underwritten health insurance. It is a myth that everyone with insurance problems is lazy, sick or poor. And it is a myth that people who choose self-employment over corporate careers are incompetent or uneducated. As we see more industry consolidation and offshoring we will continue to see people opt out for employment they can control vs. a series of jobs they lose as the result of downsizing. As premiums continue to rise it will not be a given that all employers will continue to provide health insurance. We need a system that addresses that. A lot of us out here are willing to pay reasonable premiums for good quality (not outstanding, just adequate) health care. We don’t want our doctor visits underwritten–we just want to shield ourselves from unpredictable major medical expense and buy medical care with reasonable visibility into likely costs. Insurance companies aren’t doing a good job of addressing that and health care providers don’t want costs to understandable–right now they have a perfect market with rigged pricing and little consumer discretion in terms of shopping on price. My vet can tell me how much an operation or treatment will cost–why can’t my doctor? The answer is that my vet patients see medical expense as discretionary and are concerned with price. People with insurance are used to being treated first and finding out payment liability later. Both insurance companies and health care providers find that system very profitable.

  19. The new CEO of Kaiser Colorado sounds pretty confident that major changes in the health care system just won’t occur: “Unless there’s some catastrophic event, like in the 1930’s depression that brought us Social Security, health care is not going to change that dramatically.”
    The quote comes from this article:
    http://www.rednova.com/news/display/?id=147283&source=r_health

  20. Matthew,
    I’m an inexpert, but thoughtful and interested citizen. It’s pretty clear to me that there are a lot of people who know rather a lot about the healthcare system in the US, and then many of them have good ideas worth trying, but the chasm between the policy experts and the general public is just enormous.
    What are your thoughts on ways that we could bridge that divide? How could we move the conversation forward. I think we need to help poor people, but I believe that focusing on them exclusively will derail any plan to help them properly and leave out a lot of struggling people. All those contract people employed for term-limited projects that gadfly mentioned are falling through the cracks of our employer-based system. What can we do to help them in the short term, and how can we convince those people that the Government can help and make them part of a coalition to get behind change and reform. In Massachusetts, Health Care for All is getting behind a bill to expand MassHealth and raise public reimbursement rates, but I don’t get the impression that “middle-class” people struggling to pay their own premiums see this as anything that will help them. (The ACT people talk about removing the most costly cases from the private pool, but people I’ve talked to who are even aware of the issue don’t seem to make the connection between reform proposals and them.)

  21. Gadfly:
    That’s okay. No need to apologize.
    The incompetent have that effect on people. They sow discord and ill-will wherever they go …
    Its a biblical kind of thing. Very Old Testament.

  22. //A safety net for “the incompetent”?//
    You seem to be calling me incompetent. For the sake of civility, I’m not going to reply in kind.

  23. Don:
    A safety net for “the incompetent”? How generous of you.
    I wonder, would that cover any writers we’ve heard from recently?

  24. Since the invocation of Illegal Immigration opens the door to background causes, I’d like to propose my own background issue. As long as we live in an economy that assumes 6% unemployment to be normal, then the pockets of the employed will be picked for the other 6%. Even if the ranks of the employed meanly deny direct funding of health care, that money will come out of their pockets in other ways…even if it’s to pay for bulldozers to pick the dead bodies up off the street to maintain public sanitation.
    Actually, I think the number is always larger than 6%, because it doesn’t include uninsured casual workers like temps and probationary employees. I recently read an article that pointed out that while the time people are employed has become shorter (thanks to “project-based” thinking and frequent realignment), the probationary periods have become longer – ostensibly to reflect the longer learning period required by complex knowledge-based roles. When probationary periods are a year or longer, and jobs are limited to a year or less, then companies are churning to avoid paying benefits.
    My point is that “responsibility” is only part of the picture. If we expect workers to bear the responsibility, then as many people should have work as possible, and those jobs should include access to affordable health insurance. The 6% “norm” is unacceptable.

  25. I think it’s mean to pick the pockets of workers who are trying to raise their families and live responsibly to provide health care to workers who choose to not buy insurance. I have always said that I believe that there has to be a safety net for the incompetent and chronically ill poor. But, as I’ve blogged, 58% of the 19 million who are uninsured for a full year are illegal immigrants. Secure our borders and make sure that all workers buy health insurance, and we’ll be able to have a safety net that we all can be proud of. Fortunately, it appears that pressure on Bush and those supporting illegal immigration is mounting, and maybe this problem will be fixed sometime in the next 5 or 10 years.
    Anyway, interesting post, Matthew. I respond in kind at http://www.businessword.com.
    Don

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